Bahrain’s property market is booming, with residential transactions up 5.1% and industrial lease rates up 5.3% in the first nine months of 2023, Knight Frank said.
The global real estate consultancy’s latest report, ‘Bahrain Real Estate Market Review – Autumn 2023’, states that total transactions increased by 1.9% to BD814 million in the same period.
Foreigners, who will account for more than half of Bahrain’s population by 2022, continue to dominate the rental market, with strong demand for rental properties particularly in expatriate enclaves such as Juffair, Amwaj Islands and Al Seef. The report emphasizes that this is on the rise.
“The high growth in volume relative to the value of transactions suggests a decline in prices,” said Faisal Durrani, partner and head of Mena research at the firm.
“Villa developments continue to attract buyers, with average sales prices in the mid-range priced stable at BD625 per square meter. However, credit costs are impacting luxury developments, especially apartments, with prices at BD665 per square meter It has fallen by 2%.”
Regarding the office market, the report said corporate occupiers preferring luxury Grade A offices have driven strong demand for premium office space over the past year. Still, rents for Q3 2023 are stable at BD58 per square meter.
Stephen Flanagan, Knight Frank Regional Partner and Head of Valuation and Advisory at Mena, forecasts GDP growth of 2.7%, higher than initially expected, supported by rising economic confidence, favorable government policies and economic growth. Based on this, we expect demand and rents in the Kingdom’s office market to increase. business activities.
He cited the introduction of the golden license system, which will benefit foreign and local companies, as a key government policy change and driver for growth.
The retail sector is facing challenges due to excess inventory and a shift to online shopping, which has resulted in average lease payments falling by 5%, the report said.
The retail industry is rapidly evolving, with the pandemic accelerating the shift to online retail.
“Consumers are now looking for shopping destinations that offer experiences that reflect trends from around the world. This shift in consumer behavior is driving an increase in destination retail and mixed-use developments that incorporate public realm, F&B, and entertainment. Demand is rising. Additionally, there is a real risk of oversupply in this area of the property market,” added Mr Flanagan.
The industrial sector experienced growth and the imbalance in supply and demand led to a 5.3% rise in warehouse lease rates. Government initiatives aimed at revitalizing the industrial sector are attracting businesses to Bahrain.
The hospitality industry is undergoing an ambitious transformation, aiming to attract 14.1 million tourists a year by 2026, up 42% from 9.9 million last year, and boost tourism’s contribution to GDP to 11.4%. That’s what I’m aiming for.
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